Retirement Planning

Your lifestyle during retirement is largely dependent on the financial decisions you make before retiring. Social Security and the traditional company defined benefit plans are becoming less important. The responsibility for preparing for a financially secure retirement is shifting to the individual.

Start with your employer's retirement plan. Many plans, especially 401(k) plans make it easy to save, offer investment flexibility and enable you to reduce your taxes. Many plans also have provisions for the employer to make contributions on your behalf. Review your plan details, contribute as much as you can and at least contribute enough to get the full employer "match."

If you have taken full advantage of company sponsored plans, and can still afford it, consider contributions to an IRA or Roth IRA. The tax deferred compounding aspects of these plans may enable your funds to grow faster.

Finally, call First Tech Investment Services at 800.637.0852 x3371 and talk face-to-face with a financial advisor about your retirement dreams. Once you start down the road toward that retirement, you'll be able to relax a bit more knowing you're ahead of the curve.

Retirement Needs
The fundamentals of planning for a financially secure retirement are simple - Have enough money accumulated at retirement so those savings, and the earnings on those savings, will enable you to afford the lifestyle you want until you die.

Unfortunately, market declines and reduced expectations for future market returns are playing havoc with many retirement plans. Within the current environment, here are some options to consider as you refine your retirement plan.

Save more while you are working
Be sure to take full advantage of any company offered retirement plan. If you participate in a 401(k) plan, contribute as much as you can and at least enough to earn the entire match the company may offer.

Set up an automatic savings plan. Have a set amount deducted from each paycheck and deposited into an account you earmark for retirement.

Examine your monthly household spending to see if there are ways to spend a little less. Refinancing your mortgage, increasing your insurance deductibles and reducing spending on discretionary items can add up.

Earn more on your retirement assets before you retire
Examine how your funds are invested and how your "cash" is employed. A well thought out asset allocation for your investments, one that incorporates your time horizon and risk tolerance, may provide diversification and some peace of mind. Your cash should be working hard too. Take advantage of higher interest rates on accounts that provide less liquidity and on extended term CDs if you can leave the money in the accounts or CDs for longer periods.

Work longer until you retire
Delaying your retirement enables you to have more for retirement in several ways:

• While working, you can save more in your retirement plan and through regular savings.
• Leaving all your funds within the account enable them to grow faster. For example, if you delay retirement for five years and earn just 5% on the funds, you will have about 27% more just from the earnings.
• Delaying when you start collecting Social Security will increase your monthly benefits. If you are currently 55 years old, you can start collecting full Social Security retirement benefits at age 66. If you start at age 62, you will only get 75% of that amount and if you wait and start collecting at age 70, you will get 132% of that amount.

Spend less during your retirement years
Everyone wants a "full and active lifestyle" during retirement. Perhaps you should consider changing exactly what the "full and active lifestyle" means. Less travel, less expensive cars or foregoing a second home (or opting for a smaller one) will make a difference. Anticipating and setting sensible spending priorities will probably be part of many individuals' retirement.

Leave less to your heirs
What you don't spend during your lifetime will pass to your heirs. It may be unpleasant to consider, but spending time with your family discussing your finances can help them prepare as well.